FORWARD-LOOKING PATHOLOGISTS AND LAB ADMINISTRATORS understand that the next big game in medical laboratory testing will be assays built upon genome sequencing. They also know that several companies are racing to produce gene sequencing instruments that are faster, simpler, and less costly in order to serve the needs of clinical labs.
Currently, Illumina, Inc., of San Diego is one of the biggest players in the genome sequencing market. It holds a major share of the market for genome sequencing systems. But there is one upstart company that would like to challenge Illumina for leadership in the genome sequencing marketplace. It is Pacific Biosciences (PacBio), of Menlo Park, Calif.
Two Sequencing Technologies
Last Thursday, PacBio announced it would acquire Omniome of San Diego, for about $800 million. When the transaction is completed later this year, the acquisition will give PacBio a unique mix of two gene-sequencing technologies. Financial analysts predict PacBio wants to adopt the two technologies for use in diagnostics, particularly for non-invasive prenatal testing (NIPT) and for cancer testing.
Each company starts with a different core strength. PacBio is one of the early leaders in long-read sequencing. Its proprietary system can produce long sequences with high levels of accuracy. Researchers using PacBio systems say they are identifying single nucleotide polymorphisms (SNPs) that have many more base pairs because of the long-read capabilities of the sequencer.
By contrast, Omniome is developing short-read sequencing systems. In describing the company’s proprietary technology, one analyst said, “their scar-free, Sequencing by Binding (SBB) technology provides enhanced precision of nucleotide and DNA matching by leveraging the natural matching ability of the polymerase, decreasing runtimes, and increasing the number of samples per run.”
It may not take long for pathologists and clinical laboratory managers to see long-read and short-read technologies used in assays for clinical use, once clinical studies are completed. In a story about the merger, Genetic Engineering and Biotechology News (GEN) wrote, “Omniome’s data accuracy should help the combined company, as PacBio eyes new markets for growth. They range, Christian Henry [PacBio CEO] said, from non-invasive prenatal testing (NIPT) to oncology applications, such as cell-free DNA for cancer screening and monitoring, liquid biopsy testing, and looking for residual disease.”
GEN further described the reason why Henry was interested in Omniome’s DNA sequencing platform, noting that Henry had said the platform applies Sequencing by Binding that, according to Omniome, delivers higher sensitivity, costs less, can run more specimens simultaneously, and has faster throughput, along with better matching capabilities of nucleotides and DNA.
“We believe that the technology could be as much as—or more than—an order of magnitude more accurate than existing approaches out there,” Henry said.
Keith Robison, PhD, who analyzes developments in genomics through his blog Omics! Omics!, believes that PacBio would like to use the short-read system to perform sequencing from cancer pathology samples that are preserved with FFPE (Formalin-Fixed Paraffin-Embedded). However, he also observed that “Omniome has not made public data on its platform, such as cost, turnaround time, etc. Omniome is a black box.”
Further evidence of PacBio’s interest in clinical diagnostics is a separate announcement it made last week, in which PacBio stated that it was expanding an existing, multi-year collaboration with Invitae, the genetic testing company based in San Francisco.
This collaboration is working to take PacBio’s HiFi, its long-read sequencing platform, and develop it into a “production-scale, high-throughput system” that could be used by clinical laboratories.
Along with Illumina and Omniome, other competitors in the short-read gene sequencing market are Singular Genetics of La Jolla, Calif., and Element Biosciences of San Diego.
Most clinical lab managers involved in molecular and genetic testing know that advances in gene sequencing moved faster than predicted, reaching the long-sought benchmark of $1,000 to sequence a whole human genome in 2018. Since then, companies have worked to shorten the time to sequence a genome, improve the accuracy of the sequence, and simplify the operation of the sequencing platforms, all to help clinical labs incorporate gene sequencing at some future date.
Illumina Tried to Buy PacBio in 2019
THERE SEEMS TO A BE A GOAL WITHIN THE GENOME SEQUENCING INDUSTRY for a company to have both short-read and long-read technologies. It was Illumina—a company with short-read technology—that first tried to accomplish this when it announced an agreement in 2018 to buy Pacific Biosciences (PacBio)—which is developing long-read technology.
In its acquisition agreement with PacBio, Illumina was prepared to pay about $1.2 billion for the company, working to bring PacBio’s long-read genome sequencing technology to market. The deal was announced in November 2018.
Financial analysts pointed out that long-read sequencing technology is expected to be the method of choice for most precision medicine services. Thus, back in 2018, PacBio was considered to be better-positioned than Illumina to serve this sector of clinical care. By acquiring PacBio, Illumina would set itself up to be a global leader in both short-read and long-read genome sequencing systems.
Competing firms in the gene sequencing industry immediately complained to regulators in the United Kingdom. In the United States, on Dec. 17, 2019, the Federal Trade Commission (FTC) announced it had filed an administrative complaint in opposition to the merger. The FTC asserted that Illumina was acting to unlawfully maintain a monopoly in the next-generation sequencing marketing with the United States. It scheduled an administrative trial for August 2020.
In response to the FTC’s actions, Illumina and PacBio canceled the transaction in January 2020. With its acquisition of Omniome, PacBio now has both short-read and long-read technologies. The odds are good that Illumina still wants to acquire a company with long-read genome sequencing technology.